IFRS 5 · Free study guide

    IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

    IFRS 5 governs two related but distinct areas: how to classify and measure assets a company plans to sell, and how to present discontinued operations separately in the income statement. Students often find the strict classification criteria (available for immediate sale, sale highly probable) harder to apply consistently than the measurement rules themselves.

    It's typically taught alongside other non-current asset standards and appears in intermediate and advanced financial reporting syllabi, and it's directly relevant to companies undergoing restructuring, divestment, or portfolio changes.

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    Frequently asked questions

    What makes an asset "held for sale" under IFRS 5?

    It must be available for immediate sale in its current condition and the sale must be highly probable within a set timeframe — both conditions are tested strictly.

    How does IFRS 5 affect the income statement?

    Discontinued operations are presented as a single line, separate from continuing operations, which changes how the statement is structured.

    Is IFRS 5 a commonly tested standard?

    It appears regularly, often combined with other standards in scenario-based questions involving a company restructuring or exiting a business line.

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